"We were expecting retail consumers' rush as jewellery shops were closed for a long time. We couldn't see that kind of rush."

MUMBAI/SINGAPORE - Gold demand in India improved this week as jewellery retailers reopened stores after a strike, but the world's second biggest bullion market remained at a discount to the global benchmark as purchases across the region were curbed by higher prices.

Indian jewellers went on an indefinite strike since the start of March in protest over the reintroduction of a sales tax on gold jewellery after four years. They started opening shops from last week.

"Demand is better than last week, but it is lower than expected," said Harshad Ajmera, the proprietor of JJ Gold House, a wholesaler in the eastern Indian city of Kolkata.

"We were expecting retail consumers' rush as jewellery shops were closed for a long time. We couldn't see that kind of rush."

Dealers were offering a discount of up to $8 an ounce to the global spot benchmark this week, down from a discount of up to $25 last week. The discount hit a record high of $53 an ounce in late February on weak demand.

India's gold imports in March slumped 80.5 percent from a year ago to $973 million, the government said earlier this week.

"Gradually discounts will taper off and we could see market at parity or at premium by Akshaya Trititya," said a Mumbai-based bullion dealer with a private bank.

India will celebrate Akshaya Tritiya, the second-biggest gold-buying festival after Dhanteras, on May 9.